Constellation Brands Inc. (NYSE:STZ) Q3 2020 Earnings Conference Call - Final Transcript

Jan 08, 2020 • 10:30 am ET

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Constellation Brands Inc. (NYSE:STZ) Q3 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Constellation Brands Third Quarter Fiscal Year 2020 Earnings Conference Call. [Operator Instructions] Following the prepared remarks, we will -- the call will be opened for your questions, instructions will be given at that time.

I will now turn the call over to Patty Yahn-Urlaub, Senior Vice President of Investor Relations. Please go ahead.

Executive
Patty Yahn-Urlaub

Thanks Liz. Good morning and welcome to Constellation's third quarter 2020 conference call. I'm here this morning with Bill Newlands, our CEO; and David Klein, our CFO.

As a reminder, reconciliations between the most directly comparable GAAP measure any other non-GAAP financial measures discussed on this call are included in our news release or otherwise available on the company's website at www.cbrands.com. Please also refer to the news release and Constellation's SEC filings for risk factors, which may impact forward-looking statements we make on this call.

Before turning the call over to Bill, similar to prior quarters, I would like to ask that we limit everyone to one question per person, which will help us to end our call on time.

Thanks in advance, and now here's Bill.

Executive
Bill Newlands

Thank you, Patty. Good morning and Happy New Year to everyone. I certainly hope you enjoyed the holidays and had the opportunity to include some of our awesome Constellation products in your celebrations with your family and friends. The end of every year is a time of reflection for me, and this year is no exception.

As I reflect on 2019, I'm reminded that we're not only ending a certain fiscal year, but a dynamic decade at Constellation Brands. Since 2010 Constellation has been on an incredible journey marked by strong financial performance and notable business milestones. Over the last 10 years, we've significantly increased the value of our stock and produced double-digit growth in sales, operating income and operating cash flow.

As a matter of fact, the closing price of Constellation's stock on December 31, 2009 was just more than $15. Fast forward to December 31, 2019, we closed at almost $190. This incredible increase of more than 1000% over the last 10 years, made Constellation, the best performing stock in the S&P 500 Consumer Staples Index during this timeframe. One of the biggest drivers of our success was the game changing beer acquisition that was executed almost at cap rate through the last decade. It enabled Constellation to buy Grupo Modelo brands in the United States, where we successfully built these brands for many years, while positioning ourselves for this transformational opportunity.

At that time, this deal allowed us to double the sales of our company, diversify our profit stream, significantly enhance our margin, earnings and free cash flow, while providing new avenues for growth. Since then, our beer business has made significant contribution to the overall sales, profit and cash flow results for our business and continues to be a powerhouse for growth as the number one brewer and seller of imported beer in the US market.

Calendar 2019 marked the 10th consecutive year